Which of the Following Is NOT a Characteristic of Common

question 40

Multiple Choice

Which of the following is NOT a characteristic of common stock?

• A) It has no maturity date.
• B) It is considered a permanent form of long-term financing.
• C) It has claims on assets prior to those of preferred stock.
• D) It is a residual form of ownership.

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Definitions:

Semiannually

Taking place twice annually, often every six months.

Coupon Rate

The annual interest rate paid by a bond, expressed as a percentage of its face value.

Yield To Maturity

The total return anticipated on a bond if the bond is held until it matures, considering all payments and interest.

Semi-Annual Interest

Interest on a loan or security that is calculated and paid twice a year, often resulting in a compounding effect on the total interest earned or owed.